A. Basic Agreement

• Jurisdiction: New York

A. Basic Agreement

Although no two arbitration agreements will be identical, all must meet certain basic criteria. Stripped to its core, the arbitration agreement is a written agreement between the parties to submit either an existing or future controversy to arbitration.⁵ In the private sector there is a presumption against arbitration, such that an agreement must express a clear intent to arbitrate rather than to litigate.⁶ There is no such presumption in the public sector.⁷ In some cases a court may look to industry custom to determine the intent of the parties.⁸ An otherwise unenforceable "agreement to agree" or omitted contract terms will be enforced when the parties provide for arbitration to determine such terms.⁹ The party seeking arbitration has the "burden of establishing the existence of a valid agreement to arbitrate the claim."¹⁰ The agreement need not be signed.¹¹

In general, the courts have interpreted arbitration clauses broadly and will not exclude an issue from arbitration unless the agreement clearly expresses the intent to do so.¹² Even when faced with a narrowly drafted agreement, the court will not stay arbitration if there is any arbitrable issue in controversy.¹³ In determining whether an issue is arbitrable, a court will look to see if the subject matter of the dispute bears a reasonable relationship to the general subject matter of the parties' agreement, and where such a relationship is established, an arbitrator will then determine whether the precise claims fall within the substantive provisions of the parties' agreement.¹⁴ Where arbitration is compulsory, a party will waive its right to litigate a matter in court if it fails to give timely notice of its intent to arbitrate if the contract so requires.¹⁵

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Notes:

^[5] See CPLR 7501; Riverdale Fabrics Corp. v. Tillinghast-Stiles Co., 306 N.Y. 288, reh'g denied, 307 N.Y. 689 (1954). The courts may enforce an oral "common law arbitration agreement" where there is clear evidence that one party demanded arbitration and the other party accepted the demand. Willer v. Kleinman , 114 A.D.3d 850, 980 N.Y.S.2d 567, 569 (2d Dep't 2014) (an oral arbitration agreement was formed where it was "undisputed" that plaintiff invited defendant to proceed to arbitration and defendant accepted). Under these circumstances, however, CPLR article 75 will not govern the agreement. Id.

^[6] See Basis Yield Alpha Fund (Master) v. Goldman Sachs Grp., Inc. , 115 A.D.3d 128, 980 N.Y.S.2d 21, 25 (1st Dep't 2014) (the record did not sufficiently establish a valid obligation to arbitrate where plaintiff's managing entity swore in an affidavit that plaintiff never entered into the unsigned arbitration agreement proffered by defendant); JMT Bros. Realty, LLC v. First Realty Builders, Inc., 51 A.D.3d 453, 455, 856 N.Y.S.2d 616 (1st Dep't 2008) (court erred in denying motion to stay arbitration; there was no clear intent to arbitrate claims in individual capacity when contractor signed agreement as president of construction company); Glauber v. G&G Quality Clothing, Inc., 134 A.D.3d 898, 21 N.Y.S.3d 335 (2d Dep't 2015) ("A party to an agreement will not be compelled to arbitrate . . . in the absence of evidence affirmatively establishing that the parties expressly agreed to arbitrate the dispute at hand."); Eiseman Levine Lehrhaupt & Kakoyiannis, P.C. v. Torino Jewelers, Ltd., 44 A.D.3d 581, 844 N.Y.S.2d 242 (1st Dep't 2007) (there was no clear intent to arbitrate where arbitration provision applied to fee disputes between $1,000 and $50,000, and a question of fact remained as to whether the disputed amount exceeded $50,000); USAA Cas. Ins. Co. v. Hughes, 35 A.D.3d 486, 488, 825 N.Y.S.2d 531 (2d Dep't 2006) (staying arbitration permanently when plain text of insurance policy "unambiguously" disclaimed coverage for claim); Newfield Cent. Sch. Dist. v. Newfield Cent. Sch. Teachers Ass'n, 258 A.D.2d 845, 686 N.Y.S.2d 125 (3d Dep't 1999); Trump v. Refco Props., 194 A.D.2d 70, 605 N.Y.S.2d 248 (1st Dep't 1993), appeal denied sub nom. In re Trump, 83 N.Y.2d 754, 612 N.Y.S.2d 108 (1994); Kahan Jewelry Corp. v. Venus Casting, Inc., 17 Misc. 3d 684, 686, 847 N.Y.S.2d 366 (Sup. Ct., N.Y. Co. 2007) (although, under New York law, there was no evidence of an express, unequivocal intent to arbitrate, the FAA, which preempted New York law, required enforcement of the arbitration clause unless one party objected to it in writing within ten days of receipt of the contract); Howard B. Spivak Architect, P.C. v. Northside Tower Realty, LLC, 13 Misc. 3d 1213(A), 824 N.Y.S.2d 754 (Sup. Ct., N.Y. Co. 2006) (staying arbitration because intent to arbitrate was not sufficiently clear when agreement was amended to make arbitration optional rather than mandatory); Hamilton v. Cantor Fitzgerald Sec., 177 Misc. 2d 1010, 677 N.Y.S.2d 688 (Sup. Ct., Kings Co. 1998), rev'd on other grounds, 265 A.D.2d 526, 697 N.Y.S.2d 134 (2d Dep't 1999); Astoria Equities 200 LLC v. Halletts A Dev. Co., LLC, 47 Misc. 3d 171, 996 N.Y.S.2d 516, 522 (Sup. Ct., Queens Co. 2014) ("A party cannot be directed to submit to arbitration unless the agreement to arbitrate expressly and unequivocally encompasses the subject...